Your Questions About Foreclosures |

Your Questions About Foreclosures

Your Questions About Foreclosures

Richard asks…

What is the process in buying a foreclosure, or distressed property in California?

Also can you help me understand what a tax lien property is and it’s buying process and foreclosure‘s buying process, which is better?

Your Questions About Foreclosures

The Expert answers:

High level version of the cycle.

1. People become behind in their bills.
2. At some point the lender decides that it is time to file a formal notice of default. They publicly declare that they are going to take action to seize the house (starting foreclosure).
3. Up until some point before the auction the borrower has the option of catching up and stopping the foreclosure action.
4. An auction is held and anyone can bid. The borrower/owner looses the property to the winning bidder. That bidder might be the lender as they enter the first bid.
5. If the lender is not outbid and ‘wins’ they get the property. They will then proceed to list it with an agent or otherwise work to get it sold off.

You can buy from the borrower in default before the auction. You might even try a short sale where the lender agrees to take less than they are owed.

You can bid at the auction. You need to have ready to hand over the winning amount right then and there if you win. No time to line up a loan secured by the property.

You can buy from the bank after the auction if the bank ends up with the property.

For trust deed sales in CA there is no right of redemption after an auction.

As to your other question about tax liens. You are bidding on a lien held by the county. It is not the same as bidding on the property. You buy the lien and get to collect from the county when the person pays the taxes owed. You earn a rate of return. If they do not pay then you an trigger the next step to force payment.

It is rare for a tax lien to convert into title to the property if the property has a house on it and there are no defects that makes the property worthless. Someone will step forward (the owner or the lender) to pay off the tax lien first.

Your Questions About Foreclosures

Sandy asks…

Does title company process foreclosure procedure ?

I know that title company offers loan servicing.. but if the borrower is not paying
do they process foreclosure or do i have to find a loan servicing company ?

Your Questions About Foreclosures

The Expert answers:

No….the Trustee performs the foreclosure process of a Trust Deed. Contact a foreclosure services company or ask a title company who they would recommend to perform a foreclosure on a trust deed. Usually you will have to assign a new Trustee, but the foreclosure company can handle that.

Your Questions About Foreclosures

Thomas asks…

How long does the foreclosure process typically take?

My pool service man has come upon hard times. He told me that he hasn’t paid his mortgage payment in about 8 months. He’s been through 2 revisions to his original mortgage agreement but still can no longer afford to pay the bills. He went bankrupt 2 years ago and reaffirmed on the mortgage. The house is in Florida. Chase mortgage is in a holding pattern on foreclosures presently but temporarily. Once the mortgage company decides to foreclose how long can he expect to remain in the house?

Your Questions About Foreclosures

The Expert answers:

State of Florida:
“Depending on the court schedule, it usually takes approximately 180-200 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy.”

If a homeowner moves out of the house, it is usually considered abandonment and the bank can come take possession of the house and lock out the owner.

The website cited also addresses several other issues/questions regarding Florida foreclosure process.

I have been through it, and would be happy to provide additional information from my experience and am also interested in your experience fighting an unemployment appeal (your yahoo answer quite some time ago). You can send me a message on my facebook if you wish to discuss with me.
Good luck to your pool man and thank you.

Susan Loparo
Eastlake, Ohio

Your Questions About Foreclosures

Donna asks…

How long is the foreclosure process?

Say someone puts an offer/bid on a foreclosed property & they win the bid. How long does it take to finalize and complete the processing to the point where the property is considered “sold”?

Your Questions About Foreclosures

The Expert answers:

Depending on the parties it can take from 30 days to 6 months. The new lender can also create some delays by making requirements.

Your Questions About Foreclosures

Paul asks…

How long does the foreclosure process take in Arizona? What can slow it down/stop it other than the obvious?

Someone I know just received the notification from the county recorder yesterday. I’m trying to find out approximately how long they have. There has been a medical hardship that is causing them to look at bankruptcy to deal with their other debts.

Your Questions About Foreclosures

The Expert answers:

The someone you know should immediately call the current lender and see if they have a program for that will prevent the foreclosure all together. I am sure they have many programs available. They must communicate this financial situation to the lender.

The lender does not know about individual financial situations. The banks are willing to work with you.

Depending on the type foreclosure the lender decide to use, Arizona allow both judicial and non-judicial foreclosures.

Each lender have their own procedures as to when to file a foreclosure against a person that is behind in their mortgage payments. Some file foreclosure immediately after one payment, some as long as 3-9 months after missing your first monthly payment.

There are two types of foreclosures normally used in the United States

Non-Judicial Foreclosure

Most lenders use the non-judicial foreclosure procedure. No courts or lawyers are involved.

Under this procedure normally the lender has the right to sell the property after completing the foreclosure procedure. The lender, under this procedure can not normally sue for a judgment after the sale. You do not have the right to reclaim the house under any circumstance.

Under a non-judicial foreclosure and the lender has decided to foreclose on you they issue a “Notice of Default/Foreclosure” this document is recorded at the county recorders office where the property is located.

You will receive a copy of this notice in the mail as well as one will be delivered to your front door.

At this point you now have 90 days to bring the mortgage current, refinance the mortgage or do what ever you want to do to keep your property. Your lender might entertain the idea of refinancing your mortgage for you at this stage.

Once the 90 day period is over the lender then decides to record a “Notice of Sale” at the county recorders office. You will receive a copy in the mail as well as someone will deliver one to your front door. This notice will have a sale date and place of sale.

Once this document has been recorded you now have 20 days in which to refinance or cure your foreclosure. Most lenders will not entertain the idea of refinancing their own loan once this document has been issued. Some might, but most will not. At this point the lender is interested in you paying the mortgage off or bringing it current.

At the sale if the property is sold to someone, they have to get the property recorded in their name so there is lots of legal work to be done before they officially own the property.

This new owner will contact you when all the legal documents are signed and between the two of you select a time for you to move. You might be required to pay rent for the time you stay there but this is between you and the new buyer.

If the property does not sell then the lender has to get a few legal matters taken care of so they have to wait until the legal matters are completed. This normally take 5-7 business days or less.

If this happens once all the legal matters are taken care of the lender normally hires a real estate agency to take care of their real estate sales.

An agent from the agency will contact you about the date and time of your departure. In some instances they will offer you a sum of cash for you to move.

If you are not required to go to court and has not received documents from a court stating that you must appear. This is probably the procedure being used by your lender.

Judicial Foreclosure

If the lender decide to use the judicial foreclosure procedure you will be issued a summons to appear in court. The court will set the time and date of appearance as well as when you will have to vacate the property.

If the lender use the judicial foreclosure procedure they are allowed by law to file a deficiency judgment against you.

Most lenders, though the law allow them to file for a judgment do not do so. They would just rather sell the property, write any loss off and move on without other legal problems that might cost them money and then would have to collect on the judgment if they won.

On the other hand the law also allow you the right to reclaim your house after the foreclosure procedure has been completed in some instances any where from three months and in some states up to a year.

If you received a document stating that you have to appear in court and a date for you appearance has been set, your lender is probably using this procedure.

This method of foreclosure is used only by a few lenders where both procedures are allowed.

Under either procedure if the bank can not reclaim the entire loan amount from the sale of the property they claim they have a loss. Since this is a loss to them someone had to have a gain. You are the one considered having the gain, therefore the lender would then send you a 1099 indicating the amount of gain you had.

Upon receipt of the 1099 you must file this gain with your year end taxes as t

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Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures

Your Questions About Foreclosures

Your Questions About Foreclosures